| StockFetcher Forums · General Discussion · TRO, have you considered working with Metastock | << 1 2 >>Post Follow-up |
| guru_trader 485 posts msg #45587 - Ignore guru_trader |
7/9/2006 4:42:00 AM TRO, have you considered working with Metastock as a replacement for Tradestation? I believe they handle all the markets you trade (U.S., Forex, etc.)? |
| TheRumpledOne 6,411 posts msg #45594 - Ignore TheRumpledOne |
7/9/2006 12:05:41 PM No, I have not considered working with Metastock. I don't need to "work" with anything. Funny thing is I don't need indicators to trade anymore. It's like Neo in The Matrix... Neo: "You mean I can dodge bullets like they do?" Morpheus: "No. I mean when you are ready you won't have to." My trading screen doesn't any indicators at all. I have NO squiggly lines on my charts - no upper or lower indicators. All I need to know is the midpoint of the previous candle. I mark that with a "+" on my chart I simply trade in the direction of the crossover and take profits quickly. I use 60 minute candles for entry and 5 minute candles for exit. This technique also works on daily/weekly charts for you swing traders who have to go to work and can't trade all day. I have already posted my MIDDLE filters - search for them. I use this method when trading FOREX but it works for equities (stocks) as well. Though for stocks, I prefer my Milk the Cow (Fade the Gap) strategy, which filter has been posted. The difference is with FOREX I can make 1% or more return on the amount I risk every hour. Risk $10,000 and that's $100 an hour. MAY ALL YOUR FILLS BE COMPLETE. |
| TheRumpledOne 6,411 posts msg #45597 - Ignore TheRumpledOne |
7/9/2006 12:40:21 PM Law 1 may be the reason the MIDDLE works (for me): Exit Laws Stockscores.com Perspectives for the week ending June 30, 2006 Exit a trade when it does something that you would not expect it to do. A simple rule that is more difficult to follow because knowing what a stock should do requires a good deal of experience. Since crowds tend to be predictable, so too are markets. Here are my laws of market activity to help you see when to exit a trade. Law 1 - Stocks shall not pull back more than 50% of their gain - an old Italian guy named Fibonacci recognized that many things in nature had the same proportions. He actually wanted to figure out how many rabbits would grow out of a pair of rabbits in one year. It was then discovered that proportions of the human body, how trees bud, rows on a pine cone, petals on many flowers, rows on a pineapple and many other things in nature all followed the same numerical sequence. The results are Fibonacci numbers which are the sum of the previous two numbers, starting at 1. 1,1,2,3,5,8,13,21 … Human psychology relative to stocks often follows Fibonacci numbers as well, but using the quotient of the adjacent terms which is referred to as the Golden Rule. Stocks that go up in a quick trend tend to pull back to Fibonacci retracement levels which occur at 23.6%, 38.2%, 50%, 61.8% and 76.4% of the gains. If support at a level is broken, the stock often falls to the next level. In my experience, an uptrend remains valid when the stock does not pull back more than 50% of the recent gain. We expect it to find support at that 50% level and if it instead penetrates that support price then the buyers have lost control of the stock and it is a good idea to exit. You can also plan to exit at the other levels since they too should provide support for the stock, but I find that 50% retracement levels are the strongest. Law 2 - Breakouts are no longer valid when support before the breakout is broken - A stock that moves to a new, high price level for a certain time period are said to be making a breakout. All up trends must start with a breakout of some sort but not all breakouts lead to up trends. Consider what often motivates a breakout. For investors to be willing to pay higher prices requires a changed perception of the fundamentals. The market has found agreement on fundamental value if a stock has been trading sideways at $10 a share. When the stock breaks out through $10 and up to $12 it implies that investors have found new fundamentals to warrant paying a higher price. The step up in price represents a perceived change in fundamentals. I say perceived because markets can make mistakes. Emotion may cause investors to pay too much or speculation may cause investors to anticipate fundamental change that does not happen. So, when a stock pull back below the range it held before the breakout the implication is that the fundamental reason for the breakout is no longer valid. Thus, we should see stocks when they fail to hold the support established before a breakout. Law 3 - Emotional buying always ends badly - most people are emotionally attached to their money. When stocks go up a normal person will feel emotions that make them want to buy that stock, even if it makes no rational sense. A speculative bubble is created when many people do this, sending the stock beyond its fundamental value. If stock goes in to a parabolic up trend (one that has an ever increasing slope)with increasing volume, hits a new high but closes below its open for that time period, exit. This is a sign that the bubble is bursting. Law 4 - Stocks that rally in to resistance will get stuck at resistance - investors have a memory, at least when it comes to previous price ceilings. Suppose you buy a stock at $10 and the chart shows you that the high for the last year was $15. After you buy it the stock starts to rally and move up toward those $15 highs. As it goes higher it is easy to believe that the stock is strong and will break through that old price ceiling but this is not usually what happens. If a stock rallies up toward resistance it is more likely to get stuck there, so plan to exit at resistance. Consider what happened at resistance before. This was the price point where investors cast their opinion that the stock was not worth more than that. It is where the sellers took back control of the stock and sent it lower. The sellers will tend to offer stock at these same levels, creating a wall that the buyers have to work hard to break down. Law 5 - Stocks that get no respect don't deserve yours - there are thousands of stocks for people to consider and many stocks are ignored because the companies are not good at getting their story to the investment community. A story can be very compelling to you but if no one notices the story the stock will go nowhere. When a stock trades with little volume and only goes sideways, exit the trade. Wait until some one cares or your money is just sitting in a parking lot. |
| guru_trader 485 posts msg #45625 - Ignore guru_trader |
7/10/2006 2:57:08 PM 1st Post: My trading screen doesn't any indicators at all. I have NO squiggly lines on my charts - no upper or lower indicators. 2nd Post: ... but I find that 50% retracement levels are the strongest. ========================================== Umm, don't you still need indicators, or calculators, to find the 50% retracement levels? :) |
| TheRumpledOne 6,411 posts msg #45636 - Ignore TheRumpledOne |
7/10/2006 5:52:57 PM I meant TECHINICAL INDICATORS such as macd, rsi, ema, etc... If you want to call (h+l)/2 an indicator, be my guest. |
| TheRumpledOne 6,411 posts msg #45637 - Ignore TheRumpledOne |
7/10/2006 5:54:27 PM "2nd Post: ... but I find that 50% retracement levels are the strongest." That is a quote from WWW.STOCKSCORES.COM! I posted the quote to show that there may be a reason the middle crossover works so well. |
| guru_trader 485 posts msg #45640 - Ignore guru_trader modified |
7/10/2006 6:13:09 PM If you want to call (h+l)/2 an indicator, be my guest. ================================== Yes, it's called "TRO's Middle-of-the-Range" indicator! ... or, TRO's MOTR indicator |
| Railwhore 69 posts msg #45646 - Ignore Railwhore |
7/10/2006 8:14:46 PM Though for stocks, I prefer my Milk the Cow (Fade the Gap) strategy, which filter has been posted. -------------------------- TRO, how close do you set your stops when fading? |
| TheRumpledOne 6,411 posts msg #45687 - Ignore TheRumpledOne |
7/11/2006 5:51:08 PM STOPS ARE FOR SISSIES! I don't trade with stops. I don't suggest you follow my lead. Use your own money management, risk management and position sizing routines. |
| itrademan 70 posts msg #45705 - Ignore itrademan |
7/12/2006 11:09:00 AM TRO, If you are not using Tradestation how do you trade Forex with direct access? |
| StockFetcher Forums · General Discussion · TRO, have you considered working with Metastock | << 1 2 >>Post Follow-up |
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